This is a prime example of a problem space where accuracy matters, but it also matters who ultimately goes to prison. I'm going to go out on a limb and guess it's not the LLM.
If you're acting in good faith and your accountant does something crazy or evil, your liability is limited to some extent. You may get a tax bill but you're probably not gonna end up behind bars. But if your LLM decides to do a little bit of tax fraud, you're in uncharted waters. In the end, the gun did it, but you were the one holding the gun.
A lot of jobs are like that. You're not as much buying the service as you're buying not having to worry about the service.
> If you're acting in good faith and your accountant does something crazy or evil, your liability is limited to some extent.
From my understanding, you are the person signing off on the paperwork that is submitted to the IRS.
There is this cache 22 with taxes.
You are responsible, but you outsource it to a accountant. Because you are not knowledgeable about the taxes. But you are expected to be knowledgeable to understand the tax documents that you submit to the IRS. That is why the accountant always ask you to review the documents and sign them like 20 times.
The same applies when you run a company, depending on the country, you need to prove yourself knowledgeable in accounting, before you are allowed to run a company. Normally that is included in a university degree, but if you have a middle school diploma, you need to do a official examen to get that degree.
Whatever you submit for your company, you are again responsible. Even if you hired a accountant.
So while technically, if a accountant makes gross mistakes, the bill will always fall in your lap, because you are expected to understand the reports you submit to the IRS. And catch any errors before doing so.
With the IRS, the burden of proving your innocents is often put you. Its because the good faith argument can be misused easily. That is why the buck stops at you.
So using a LLM or a accountant, really does not matter. Sure, a accountant can go to jail if there has been major issues (its not going to be with one client issue).
But you can lose your house / company, have your life ruined by whatever you submitted.
I don't think that's actually the case. If you get an tax attorney to document your treatment and indicate that they believe it's legal (e.g. a tax opinion letter), then you're off the hook for penalties and criminal liability (assuming the tax attorney did everything properly). You still have to pay the difference though.
An accountant may not save you from financial penalties but I believe that they are liable for them so you can recover it from their insurance.
This is also something where how you interact with the IRS really really depends on your initial interactions.
If the IRS comes to you and says "your taxes are wrong you owe X amount" and you immediately turn around and prepare to fight them then they are going to be merciless with you.
But if they come to you and you turn around and show the auditor your methodology and what you thought you were supposed to be doing, etc and focus on fixing the issue and settling your debt then they are going to hook you up with IRS staff dedicated to helping fix this kind of stuff.
And most importantly they'll connect you with someone who can set up a payment plan out over whatever period of time to pay back what you owe without killing your business or taking your assets.
But again if you get audited and immediately become adversarial then they'll assume you were doing it intentionally and will take anything not bolted down.
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The rationale is basically that the IRS staff are mostly there to help you get your taxes in order and ensure that those taxes are paid but as soon as it starts to look like you are intentionally avoiding paying your taxes you get kicked over to the enforcement divisions and eventually the criminal divisions.
So good faith is absolutely something the IRS will honor but that stops the moment it looks like you are trying to hide stuff from them.
“A computer can never be held accountable, therefore a computer must never make a management decision.”
– IBM Training Manual, 1979
https://simonwillison.net/2025/Feb/3/a-computer-can-never-be...
I agree with you on every point but it is interesting to see real world benchmarks like this. Showing the standard benchmarks that all LLMs use is not only boring but at this point likely gamed or even has issues (according to OpenAI) by every LLM.
>has issues (according to OpenAI)
What is this referring to?
I've been testing various big and small models for years and, about a year ago, switched my attitude from "biggest model is best!" to "best depends on task".
For example, I had a simple coding task which required making 3 trivial changes in 3 source files. Biggest Model completed task perfectly and took 90 seconds.
Smaller Brother also completed task perfectly, but took 30 seconds and cost 5x less.
1 Just as with traditional non-ai ways of doing things, there is a deterministic layer that can trigger when things are off. This can range from letting the ai know to stopping before a human confirms.
2 Usually, specially for SMBs, nobody goes to prison over accounting errors. That's because SMB owners make mistakes all the time and, because of that, authorities are fairly practiced in understanding how mistakes look, and how fraud looks.
Sure! In classic accounting firms you'd typically have one accountant doing the books and then the other reviewing the first accountant's work. Given the model's accuracy (and models will only get better), only by automating the "doing" and keeping a human to do the review part we will already shave huge amount of time and costs without risking the compliance part.
Does the reviewer learn to be a good reviewer by first doing though?
What if the model misses something entirely, so it's not in the review? ;)
It is given a list of transactions as an input. If it misses one or more of them, that will be noticeable immediately. In the VAT return, one can see if something is missing very easily if the numbers do not align.
At some point I feel like you're better off making the model build a tool to scrape all the values...
The LLM is, after all, trained on a world with a lot of tax fraud in it.
It’s almost impossible to be in a situation where your taxes end up this wrong you’re accused of fraud. I honestly do not believe my accountant does anything better than AI or AI generated code that does calculations to see what you should be paying.
It's not just about being accidentally wrong. An LLM can decide to actively engage in fraud. One mechanism, which you also see in vibe coding, is that the models are very goal-driven. If they can't accomplish the goal for some reason, they will sometimes decide to cheat by, for example, faking tests. I can easily imagine an LLM that stumbles across some benign issue that prevents the numbers from balancing out and then decides to cover it up to complete the task.
Another problem is that "evil" alignment is apparently a pretty big and nebulous cluster that's pretty easy to activate. Ask a model to write a snippet of insecure code, for example, and they may also all of sudden decide they hate minorities. So if you ask it to bend the rules in a small way once, you might end up with an evil accountant before you know it.
And that's before we get to an invoice for a service named "disregard previous instructions and...".
> This is a prime example of a problem space where accuracy matters, but it also matters who ultimately goes to prison.
I don't disagree that tax fraud is bad but accuracy really doesn't matter 1/10th what people think it does.
Something to keep in mind in the EU with VAT is that there are approximations, errors and then huge frauds like the infamous "carousel fraud". Sadly the carousel fraud is all too common in the EU: this one gets people really sent to jail. But it's not an error a LLM shall make that could lead to a carousel fraud taking place: it's an elaborate scheme.
Now... If you're self-employed and have to pay the VAT (which may or may not be the case depending of the type of self-employment work you do) or if you're a SME and you've got approximations and errors well it's really not a big deal.
Because the public servants in charge of collecting the VAT and verifying that you filled your stuff correctly... Do make shitload of errors too. And then, depending on the country, these public servants have a special privilege: they can decide an amount of VAT+fine (if there's a fine) that you agree with and if you agree with it, their number is the number.
It's everything but a correct number. It's a number they ended up on that is "close enough" (for some definition of "close"). Sometimes by hammering number after number on a little calculator and then ending up saying:
"We ask you to pay 3500 EUR of additional VAT. If you sign here and accept, the IRS (equivalent of the IRS) won't be able to bother you ever again for that year/years".
This notion that, somehow, there's "one" correct number and that public servants paid something like 2 K EUR net per month (which may be the reason why so many are so prompt to ask for bribes btw) can determine it in a few minutes is ridiculous.
It's simply not happening. Usually the accountant doesn't know the exact number. The SME owner doesn't know the real amount of VAT due. And the public servant(s) in charge of a VAT audit, if any takes place, certainly as zero clue as to what the exact VAT number should be.
The rules are way too complicated, there are way too many special cases, and some things are simply extremely hard to take into account (for example during one audit the person told me he disagree with the 90% of 21% VAT deducted for my ISDN line --yup it was a long time ago-- but then I told him it was during a previous TVA audit, a few years before, that the VAT auditor, seen my job, fixed at 90%).
For some stuff you can opt for a fixed number: say a car, there are rules, depending on the country, where you can, say, get back 75% of 50% of the VAT. But people can also, depending on the country, opt-in for the "real usage": you do 12 387 km during the years, how many were really for work? 6 287 km ? Or may 6 275 km?
What if one day while going to work, you took a detour because you want to drop a gift for your grandma's birthday? How were these kilometers accounted for?
Restaurant bills? What if one of the person wasn't work related (your nephew happened to be in town and you had to take car of him and you knew the clients well so they didn't mind: how does the accountant account for that)?
Gifts to client. You got a discount buying 6 packs of bottle of champagne, but not five (no discount if only five), so you bought a sixth one. But that sixth one you kept for you.
Nobody computes those amounts correctly. Nobody.
And don't get me started on the public servants who'll give, during an audit, an unfair advantage to people from their community (whatever that community may be) or those, literally, banging underneath the table while talking about their next vacations: they're telling you an "arrangement" can be made. Basically you give that one person some money (cash bills of course) and, boom, the 20 K EUR of VAT you had to pay suddenly gets lowered down to 5 K EUR.
You refuse? It'd be too bad if those 20 K became 25 K EUR wouldn't it? Mafia-style.
This is all happening. Don't tell me it's not happening because I know people on both sides of these "trades".
Depending on the EU country, it can even be the norm.
As rational people who like determinism (at least I do), at first glance it looks like a SME's accounting is something square but it really ain't. Or let's put it this way: it there's one number that is the really the amount of VAT the SME has to legally pay, I'd guesstimate 0.01% of the SMEs out there pay, to the cent, the proper amount.
All this to say: the approximations, hallucinations and errors of LLMs in accounting for VAT are probably just on par for the course.
P.S: ah yup... The boss (say major airline company) giving a business card and its PIN code and asks to take good care of the clients: and an employee takes them to strip clubs, they all get drunk like crazy, and explodes the expenses on the business card. Way, way, way more than what is OK to put into expenses to entertain clients. Well guess what: I know for a fact this happens too. And I know for a fact this ain't accounted for properly either.